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Addressing Budget Credibility Fact Sheet

In 2018, the International Budget Partnership (IBP) began to examine the extent, causes, justifications for, and consequences of deviations from approved government budgets. Our work on this topic is ongoing in many countries and from several angles, with a special focus on the impact on vulnerable populations.

What Do We Mean By “budget Credibility”?

IBP defines budget credibility by a government’s ability to meet its revenue and expenditure targets during the fiscal year. When actual spending deviates from the approved budget, we describe it as either:

  • Underspent: if actual spending is less than what was allocated in the budget, or
  • Overspent: if actual spending is greater than what was allocated in the budget.
    A national budget may be underspent or overspent overall, within a specific area of the budget, or both.

Examples of budget credibility challenges in select countries and in critical areas:

Argentina: According to a 2013 survey, only a third of children had access to early childhood services. A program designed to close this gap has been consistently underspent, including by nearly 60% in 2016.

Nigeria: Despite high occurrences of out-of-school children, the Ministry of Education consistently underspent its budget, with deviations ranging from 12% to 37% between 2013 and 2017.

Sri Lanka: The agricultural sector employs 26% of the country’s labor force but suffers from declining productivity. Regardless, the government budget for agriculture and irrigation was underspent from 10 to 40% annually from 2011 to 2017, with the exception of 2015, an election year.

Immunization: A sample of 22 countries points to average underspending of roughly 30% of the immunization-related budget. Global data from WHO and UNICEF suggest that funding or procurement delays can affect the availability of vaccines, which may in turn lead to service interruptions.

Read our fact sheet for more information

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